FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Monday, November 23, 1998

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[English]

The Chairman (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order and welcome everyone here this morning. As everyone knows, the order of the day is Bill C-43, an act to establish the Canada Customs and Revenue Agency and to amend and repeal other acts as a consequence.

The first presentation will be made by the Professional Institute of the Public Service of Canada, represented by Mr. Steve Hindle, president; Madame Hélène Paris, research officer and compensation analyst; and Monsieur Gaston Lampron, vice-chair, auditing group.

As you know, you have approximately 10 minutes to make your presentation. Thereafter we will engage in a question-and-answer session.

Welcome.

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Mr. Steve Hindle (President, Professional Institute of the Public Service of Canada): Thank you, Mr. Chair. Considering the timeframe, I'll jump right into it, shall I?

The Professional Institute of the Public Service of Canada is the largest union representing professionals working in the public service of Canada, including the provinces of New Brunswick and Manitoba. We represent close to 36,000 members across the country in various milieus and working in various professions.

Some 6,000 federal employees have been transferred to a new national air traffic control operating company, Nav Canada, and we have 300 members there, so we have some experience with privatization.

We also have experience with other agencies, such as the Canadian Food Inspection Agency, where we represent professionals in a number of disciplines, including veterinary medicine as well as scientific research and computer systems.

We have also appeared before committees. In addition to talking about the Food Inspection Agency, we have also appeared in relation to the Parks Agency. Some of what we have said in front of those committees will be reiterated and reinforced today.

I'd like to talk about the alternative service delivery concept and the Canada Customs and Revenue Agency specifically. We have taken the position that alternative service delivery should not be rejected out of hand, but nor should it be seen as a panacea. Our position on ASD calls for a thorough comparison of all the costs and other implications when evaluating decisions to deliver programs using alternative service delivery methods.

The institute believes that if fair and comprehensive comparisons are made, any current problems with program delivery can in many cases be resolved just by making internal adjustments rather than embarking on radical reforms in service delivery.

The institute is concerned that the government may consider ASD methods as the solution to perceived problems with the current delivery of government services. Where alternative service delivery appears to be part of the solution, the institute calls for careful consideration of the costs and ramifications for Canadian taxpayers. An ASD solution may be justified in some cases, but it must be demonstrated and supported by a business case prior to legislation. ASD should not be embraced purely on the grounds of ideology. In the case of Revenue Canada, ASD has not been demonstrated and supported by a business case prior to legislation.

Shortly after the Speech from the Throne announcing the concept of the Canada Customs and Revenue Agency, three objectives for the agency were defined by Revenue Canada. The agency was to deliver programs and services in a more effective and efficient manner through greater autonomy and flexibility; improve services and reduce the costs of revenue administration and compliance by working with the provinces to eliminate overlap and duplication; and third, strengthen the effectiveness of the federation and contribute to national unity by establishing the agency as an organization that provides Canadians with services that are both federal and provincial in nature.

When the second progress report on the proposed agency was released in January 1998, it became apparent that the second and third objectives cannot be met. The first objective, the delivery of programs and service in a more effective and efficient manner, is the only objective the agency has any hope of achieving. Revenue Canada, however, has not been able to demonstrate that this objective will be met with the creation of the agency.

A recent article on the analysis of the proposed agency, published in the Canadian Tax Journal, concludes that the proposed agency may only achieve a real, if modest, degree of success in promoting greater administrative efficiency and flexibility, and it does not materially advance either the goal of reducing the perception of politicization or the goal of increasing federal-provincial integration in tax administration.

Similarly, in his recent review of the first ASD entity to be established since the 1996 budget, the Canadian Food Inspection Agency, the Auditor General of Canada claims it is too soon to tell if the agency will use the new flexibility it has been given to meet the government's commitment to a new and better way of delivering services. He also warns that the longer the agency takes to create systems and practices that reflect its powers, the more it risks falling into traditional ways of doing business.

The government has chosen to establish the Canada Customs and Revenue Agency as a separate employer under part II of schedule I of the Public Service Staff Relations Act. The PSSRA is a 30-year-old piece of legislation that has never had a major overhaul. It is a regime that could be cumbersome for agencies, since it allows only minor tailoring to meet specific organizational needs.

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The PSSRA fits the context of bargaining in the public sector, where broad public interests must be taken into consideration, due to the nature of the services being provided. It provides for mobility of staff and similar terms and conditions of employment across departments. This explains the restricted scope of collective bargaining, the right to designate positions for essential services, dispute resolution mechanisms to deal with potential strikes, and the binding arbitration process.

For years the institute has been on record as supporting the revision of the PSSRA. The institute is willing to join with government in working out means to inject a greater flexibility into the existing system and statutory framework. This could be a speedier means of making government services more effective than the creation of large new ASD agencies.

The institute is uneasy about the emphasis on administrative flexibility that is constantly made when the government advances the concept of alternative service delivery. Collective agreements between the federal government and the institute or other public service unions are currently filled with clauses that give the government the discretion and ability to override provisions of an agreement for operational or other reasons.

The institute agrees that there is a need in the federal public service for more flexibility in human resources administration, particularly with respect to staffing actions. Staffing actions and questions involving the determination of merit take far too long, because of the current application of the Public Service Employment Act and the time required to take cases before the Public Service Commission. The institute does not agree, however, that the solution lies in creating ASD agencies that will not be covered under the PSEA, as is the case with the Canada Customs and Revenue Agency.

The Public Service Commission is currently addressing the need for staffing reform in the federal public service. Through its staffing reform initiative, the Public Service Commission has already delegated substantial staffing authority to departments, which significantly extends management rights and discretion in the area of staffing. Furthermore, the PSC believes that staffing reform can be achieved within the current legislative framework.

In its most recent annual report, the Public Service Commission states:

Staffing reform does not require changes to the PSEA. It does, however, require that our human resources management partners be fully aware of the flexibilities that currently exist under the Act in order to make optimum use of them. (...) We are intensifying our efforts to help departments and agencies develop their own staffing regimes within the framework of the PSEA. In so doing, we believe that they will be better able to meet their business needs and to deliver high-quality, affordable policies and programs to Canadians.

The June 1996 joint union-management opinion survey of the 5,000 employees in the auditing group at Revenue Canada had identified serious problems with the staffing system. For example, the majority of employees surveyed—in this case, 74%—did not have confidence that staffing practices were objective and fair. The department was prepared to make the necessary changes within the existing framework, but chose to put them in abeyance, pending the creation of the new agency.

In the summer of 1997, the department decided to consult with 7,000 Revenue Canada employees for their views on a new human resources framework for the agency. Eight specific design teams were established to examine human resources issues such as staffing, classification, and training and development. It is our opinion that a new human resources framework for Revenue Canada could be designed and implemented without the creation of a new agency.

During the House debates regarding Bill C-43, on October 1, 1998, the Minister of National Revenue, the Honourable Herb Dhaliwal, stated:

The new agency will benefit from management practices that are characteristic of successful organizations outside of government.

The institute believes that Revenue Canada can adopt and should be expected to adopt new management practices without the expense of creating this new agency. Successful management practices are not dependent on organizational structure.

It's interesting to note that the Auditor General of Canada, based on his recent review of the Canadian Food Inspection Agency, cautions that other ASD initiatives should recognize early on that establishing a new human resource management framework as a separate employer is a complex task. A new framework requires time and resources to design and implement.

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The provinces are not on board with this new agency. We have seen nothing from the provinces to indicate that any of them have stated they will participate and are prepared to participate in the creation of the new agency. The departmental officials continue to say that harmonization and the creation of the new agency don't necessarily go hand in hand, yet harmonization with the provinces is undoubtedly one of the goals of the government with the creation of the agency.

Moving on to whether or not they'll provide tax services more cheaply, a recent analysis of the proposed Canada Customs and Revenue Agency published in the Canadian Tax Journal concludes that the tax savings projected by Revenue Canada are relatively modest and depend on the assumption that all provincial taxes in all provinces—or in all except Quebec—will be administered by a single tax authority. This article also notes that no estimate was made of any increase or decrease in costs to the federal government from conversion of Revenue Canada to an agency, nor was any account taken of charges that might be made by the agency to one or more provinces for collecting taxes that were not sufficiently harmonized with the corresponding federal tax to qualify for collection without charge.

Revenue Canada has misled the Canadian government and taxpayers into thinking there are no costs associated with the creation of the agency. Revenue Canada documents have revealed that there is a $280 million shortfall this fiscal year, for the first time in Revenue Canada's history. We believe this shortfall is in part due to the millions of dollars that have been spent on the agency.

Revenue Canada has spared no expense with respect to the agency. This shortfall is having a negative impact on departmental operations. In order to address this shortfall, Revenue Canada's customs, trade, and administration branch's operational budget has been cut by anywhere from 10% to 15%, and all tax service offices' operational budgets will be cut by an additional 2%. Thousands of employees have been diverted to work on the agency concept instead of administering Canada's tax laws in a fair and timely manner. Travel budgets have been cut across the country. Tax auditors may be limited in their ability to visit taxpayers to conduct reassessments, and tax collectors are being restricted in their ability to collect taxes owing.

The structure proposed for the new agency adds a level of bureaucracy in the form of an appointed board of management and secretariat. Time, money, and staff will have to be provided for the board and its staff. It will cost millions of dollars to reprint thousands of forms, publications, letterheads, and business cards; to change signs on all taxation and customs offices and at border crossings; to change the identification on customs uniforms and vehicles; and to modify computer systems.

Bill C-43 will create a new 15-member board of management: one chair, one commissioner, 10 provincial nominees and one territorial nominee, and two as yet unspecified representatives. This bill creates a new commissioner, a new patronage position to be appointed by the government. The agency will have carte blanche with respect to contracts and with respect to the management of property, material, information, and technology. With limited outside oversight, the appearance of favouritism and abuse of power by bureaucrats is very high.

In order to expedite the discussion period, I won't read all of section III on the amendments, but I will highlight that if Parliament decides they must go ahead with this, we see some areas in the legislation itself that should be amended.

More specifically, clauses 51 and 54 must be amended to preclude the application of section 7 and paragraphs 69(3)(a) and 69(3)(b) of the Public Service Staff Relations Act to the agency. This will compensate for the loss of rights under the Public Service Employment Act, and this will guarantee that all matters related to classification and staffing are negotiable.

Bill C-43 must provide the guarantee of external third-party recourse and redress mechanisms for staffing and classification issues.

Bill C-43 should be amended to allow employees of the agency to refer to adjudication grievances related to termination of employment or demotion for non-disciplinary causes, such as incompetence or incapacity.

Bill C-43 must contain a specific statutory provision to override the effect of subsection 11(9) of the Financial Administration Act and provide for the negotiation of National Joint Council policies and directives. This will allow the continuation of National Joint Council policies and directives in the agency until acceptable replacements have been negotiated.

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Bill C-43 must contain a specific statutory provision to override the effect of subsection 11(8) of the Financial Administration Act and provide for the negotiation of the workforce adjustment directive. This will allow the continuation of the workforce adjustment directive until an acceptable replacement has been negotiated.

And the final recommendation on amendments to the bill is that it must guarantee that the board of management for the proposed agency include at least one member nominated by labour to provide labour relations experience and expertise.

We have raised a number of issues with this brief, and we have done so in other venues at other times. This would be an appropriate time to get into some questions and answers and further discussion of it, Mr. Chair.

The Chairman: Thank you, Mr. Hindle. That's exactly what we're going to do: we're going to get right into the question-and-answer session. We will begin with Mr. Kenney.

Mr. Jason Kenney (Calgary Southeast, Ref.): Thank you, Mr. Chairman.

To the witnesses appearing before us, I have had the opportunity to meet with representatives of PIPS before this, and I want to congratulate you on the very thorough research you've done on this bill and this proposal.

My first question to you is a general one. Much of your submission addresses issues of staffing and classification and questions of this nature, which relate to your status as employees of the department. It has been suggested by the government that this bill is necessary in order to give it greater flexibility in compensating skilled professionals who work in the department, particularly in the areas of information technology and auditing. They suggest, compellingly, that they have a hard time keeping well-qualified staff in those areas, because the Treasury Board guidelines for compensation don't allow the department to provide compensation competitive with the private sector. Hence there's an unacceptably high level of turnover, particularly amongst people in the auditing sections of the department.

So I wondered if you could comment on whether or not you see the same problem as the department does, and if so, how you would address this apparent problem, the inflexibility of Treasury Board compensation guidelines, without the passage of Bill C-43.

Mr. Steve Hindle: I'll answer the very general question and then I'll turn it to Gaston to talk specifically about the auditing function within Revenue Canada.

It's possible that the creation of this agency will ultimately lead to a more comprehensive compensation regime for the employees of the agency. But it strikes me as very strange for the government to admit on one hand that it's their own polices, their own established policies within the Treasury Board Secretariat, that are causing them the problems, and yet they will not address those problems directly with the Treasury Board Secretariat. And in general, for the public service as a whole, it is incomprehensible to my why government needs to get away from its own rules and create alternative service delivery agencies to give themselves more flexibility, when they have the authority to organize the public service in a manner that would give them that flexibility for the public service as a whole.

It seems to me what we are seeing is an inability or a lack of desire to address the real issues in the public service, and that has led to a serious level of frustration amongst senior government officials in that they are not able to convince government to do things to change the way the public service is managed, so they have to get out from under the rules. It just seems that more and more of these agencies are being developed, and that is the overriding issue: they're trying to get out from under the government's own rules.

Now, for specific issues with the auditors, Gaston.

[Translation]

Mr. Gaston Lampron (Vice-Chair, Auditing Group, Professional Institute of the Public Service of Canada): I just want to point out to you that all the necessary flexibility is available, at Revenue Canada, without creating an agency. Right now, Revenue Canada is perhaps the best run and best organized department in the entire public service.

The Auditing Group of the PIPSC and the department conducted a survey three years ago on the difficulties in hiring competent auditors, CAs, CGAs and CMAs. There was a real recruitment problem.

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All I can say is that, together, we managed to find solutions without having to consider creating an agency. We made recommendations and we established committees to review staffing, performance appraisals and a number of other related subjects. However, these committees had to be put on hold because of the proposal to set up an agency. We could not operate in the same way within such a framework.

I can certainly tell you that, if we became an agency, I don't believe we would have unlimited funds to hire competent auditors. At any rate, we wouldn't have more than we have now. That's why I feel it's pointless to bring in legislation creating an agency when everything could be settle within the department itself. That's the most important point I would make here: we don't really need an agency to get things done.

The Chairman: Mr. Perron.

Mr. Gilles-A. Perron (Rivière—des—Mille-Îles, BQ): Good morning. In your statement, Mr. Hindle, you mentioned that several millions of dollars have already gone into this. Could you pin down this amount more exactly for us? Is it $10, $25, $50 or $100 million?

[English]

Mr. Steve Hindle: Unfortunately we can't attach a figure to it, because quite frankly, the department has been unable to satisfy us with the figures they have used. There's a report in this morning's Ottawa Citizen with some numbers in it, but those are generalities coming from the department.

We have filed an Access to Information request to try to get to the true costs. We have yet to have a reply. It strikes me as unusual, for a department that is so meticulous in the collection of statistics—and I know this because I used to work there in their systems, and I wrote systems to collect statistics—that they can't tell you how much they have actually spent on work to create the agency.

We are saying it's millions of dollars because we expect that probably at least $10 million—it's probably more than that—has been spent to create the agency. You might want to consider that if they haven't spent that amount of money, then what the heck are they doing creating this huge new tax agency without having done the groundwork required and without having spent the money required to create an agency with this complexity and authority? There's something not adding up here.

[Translation]

Mr. Gilles Perron: My question is mainly for you, Mr. Lampron. According to the answer that you gave, you believe you have all the tools you need to provide impeccable service and cost recovery. Why, then, did Toronto CBC report that you were short between 500 and 1,500 auditors, which led to a shortfall in uncollected income tax amounting to over $500 million? Where is the problem? Is the money being spent on setting up an agency? Are enough employees not being hired, or are employees not being paid well enough?

Mr. Gaston Lampron: It's a problem related to the negotiation of collective agreements. The proof that we can get along well together within the present system, is that auditors have reached an agreement with Treasury Board and Revenue Canada regarding their working conditions. Generally speaking, people are quite satisfied with the agreement that was reached.

The difficulties in recruiting and keeping employees cannot be resolved in two or three years. It may take five to seven years. I think that if Revenue Canada has obtained enough money to settle them this time, it will be able to obtain enough again in the future. We don't need to create an agency.

The Chairman: Thank you, Mr. Perron.

[English]

Mr. Martin.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you, Mr. Chair.

Thank you for being here, Mr. Hindle.

One of the things that struck me about your presentation and your brief is how you outlined what seems like a near missionary zeal to implement this change, even though there doesn't seem to be any substance to back up the energies dedicated to it.

You commented that actually thousands of employees have been allocated to the task. In partial answer to the previous question, I would suggest it's not just the hard cost, the spending from the government, that has gone into this, but also the shortfall in revenue that would have come in had these thousands of employees been busy doing what they were actually hired to do, which is collection, auditing, etc.

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So when you whole-cost this project, there actually may be more costs that aren't as obvious. I'd ask you to comment on that.

Also, the whole thing seems to be driven by ideology. The real question I'd like to ask you is on anticipated savings versus the costs of conversion. Have you ever seen any anticipated savings in hard numbers? And what about the possibility of job loss? That is certainly what I hear about most, representing Winnipeg, where there are thousands of taxation employees. You used the Nav Can example. I was wondering if you could extrapolate that to the probable consequences in your own department.

Mr. Steve Hindle: Certainly.

The whole cost of the agency is an important consideration, and probably the most difficult aspect of the cost is forgone revenue. Just how much in taxes that are owing have gone uncollected or have been delayed in being collected as a result of people concentrating on the agency? I couldn't give you a number on that, and anything I put forth would just be an estimate. It's interesting to note that even the department can't give you a number on that.

As for the real savings to be had, we're talking about a department that is probably one of the most efficient already in government. They spend, by their own numbers, just over $1 to collect $100 worth of tax. To me that seems pretty efficient. I recall from my own time working in the department that they took great pains to ensure that they did things the right way, and they tried to get them right the first time they did them, rather than redoing them.

So I don't know where the efficiency gains are going to be made in an agency, particularly if you add in the initial inefficiency of amalgamating with provincial revenue departments and the aspects of provincial tax collection that the agency is not currently familiar with. They do a significant amount of collection for the provinces already, but even more is envisioned in this.

On the issue of job loss, the deputy indicates that he needs all the people currently working for the department to be able to continue to operate as an agency. I have no reason to disbelieve that statement on its face. But if you look at what has happened with Nav Canada, they transferred over 6,000 federal public service employees to the new entity—the private sector corporation known as Nav Canada—and at the end of the two-year job guarantee, they went through a downsizing exercise, where more than 1,000 positions were cut.

We've experienced the same thing in the Canadian Food Inspection Agency. Even before the two-year period expired, they went looking for volunteers to leave the Food Inspection Agency.

So they're moving portions of the public service out into either the private sector or a different portion of the public sector, and then they're doing the cuts there, rather than doing them from the public service itself.

While I don't disbelieve what the deputy has told me, I do have to wonder, on behalf of my own members, what they're facing in two years with the creation of a revenue agency.

The Chairman: Thank you.

Do you have a final question, Mr. Martin?

Mr. Pat Martin: From a labour relations point of view, it was interesting for me to note that the new agency will still be under the PSSRA rather than the Canada Labour Code. Was it ever contemplated or raised to have the new agency subject to the recently amended Canada Labour Code rather than the outdated and ponderous Public Service Staff Relations Act? Canada Post is what I'm envisioning.

Mr. Steve Hindle: Certainly, and we have raised with the departmental officials the possibility of using the Canada Labour Code for this agency. We did it with the Food Inspection Agency; we did it with the Parks Agency. We have raised it, in very broad terms, for the whole of the public service.

We think it's time to overhaul the Public Service Staff Relations Act for the federal government, as a federal employer, to come under the legislation that applies to other federal employers. We recognize that there is an element of risk for the unions and the employees in that it's different legislation from what we're used to, but it provides for the parties to meet at the table and discuss all the issues pertaining to the employment relationship and the terms and conditions.

Early indications from the previous Deputy Minister of Revenue Canada, Pierre Gravelle, were probably from a personal point of view, but he liked the idea of the Canada Labour Code. Unfortunately, in the final analysis, they decided to choose something else. They decided to choose a bit of a hybrid—the separate employer with some minor modifications—one that we're not that comfortable with, because we recognize that for employees, it takes away rights currently enshrined in the Public Service Employment Act without conferring a mechanism for the employees and their representatives to deal with the issues that would normally have been covered under the Public Service Employment Act.

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Our preference would be the Canada Labour Code. Our real preference is that it remain as a department in the government.

The Chairman: Thank you, Mr. Martin.

Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Mr. Chairman.

Thank you for your presentation. It's good to see you again.

I have concerns relative to Bill C-43 on a few fronts: from a Canadian taxpayer's perspective, on the accountability issues, on the concentration of power, and on the privacy issues. I see this being inconsistent with the devolution of power to the provinces in a number of areas and also inconsistent with some very important federal-provincial relations trends.

The fact that the minister hasn't even met with the provincial Minister of Finance in Ontario yet to discuss this is a little inconsistent with the general trend of engagement. That might indicate that there's lack of support for this initiative, and without that, I suggest the minister is probably not going to be able to achieve the $172 million he purports to be able to save with this.

You made a very interesting comment, Mr. Hindle, relative to the general trend in the public service toward alternate service delivery. Do you know of any quantitative information from past government experience that provides unequivocal evidence of savings from ASD in the long term? I'd be interested in knowing about that.

A demonization of the public service has occurred. We recognize that there may be inefficiencies and that we have to improve the delivery and create more accountability. But if it is a systemic problem, why are we dealing with this issue, on an ongoing basis, in a band-aid, department-by-department, individual initiative approach? It doesn't seem consistent with what we really should be dealing with.

Have public servants provided a more holistic approach or recommendation to actually improve the way they're doing their jobs, or so that the entire public service could become more responsive to the current needs of Canadians?

Mr. Steve Hindle: In answer to the first question, we have seen no figures that were produced as a result of going back and looking at the creation of an agency or carving out a piece of the public service.

The one that would come closest, in terms of size when it was created, is Canada Post—the devolution of the post office department to a crown corporation known as Canada Post Corporation. I haven't seen anything from that experience that showed that the costs of running the mail service in this country changed one way or the other. We all have our own impression that the costs of mailing a letter and using the services of Canada Post have gone up, rather than gone down. Has it been more efficient? I don't know. They are operating much more like a private sector employer and a business now than like a government department.

But with the Food Inspection Agency, and with what they have in mind for a review within a two- to five-year timeframe for the Parks Agency, we have seen no figures for improved service or improved efficiency. And it does seem to be a band-aid approach, as you mentioned.

We can see no compelling reason for this agency to go ahead. We do not understand what is driving this government to create a separate agency out of the tax department. It continues to baffle us that they think they can get efficiencies in a department that's already very efficient, and we continue to wonder why they are doing this.

As to why they won't address it in the public service as a whole, my impression is that they see that as just too big of an issue to try to grapple with. Yet they have no problem doing it piece by piece, and unfortunately doing it piecemeal, and having different approaches for different parts of the public service.

The Chairman: Thank you, Mr. Brison.

We're going to ask Mr. Discepola and Ms. Redman to ask their questions, and then we'll get the witnesses to respond.

Mr. Discepola.

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Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.): Thank you, Chair. I told you I'd be very brief.

In your presentation, you say:

It will cost millions of dollars to reprint thousands of forms, publications, letterhead, business cards; to change signs on all taxation and customs offices and border crossings; to change the identification on customs uniforms and vehicles; and to modify the computer systems.

I'd like you to elaborate on that. One of my concerns in the past has been that we've lived with similar problems in the transfer of the airports in the Montreal area. I'm reassured that nothing really would change, that employees of the agency would be collecting the customs, etc. I'd like you to elaborate on that more. Are you saying there will be a delivery of service through the agency that they will themselves only control, especially at ports of entry? Or do we as a government still have our say in the type of delivery of services especially?

The Chairman: Ms. Redman.

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chairman.

Mr. Hindle, you talk about employees losing their rights, and while you have some good things to say about the current structure and efficiency of Revenue Canada, you also talk about rigidity and the fact that there definitely is room for improvement. Under the proposed agency, you still will negotiate your collective agreements with agency management instead of the Treasury Board. My question is, do you really feel you'll negotiate a worse deal than the one you have now?

The Chairman: Okay, two questions.

Mr. Steve Hindle: This committee and Parliament itself should be concerned about government's influence or control over operations of the agency. I suspect that at the outset you would see very little change. The outward appearance will change, because the name will be different, but the people doing the job will not change at the outset. But will that continue to be the case two, three, four, or five years in the future? What about 10 years in the future?

What is the relationship between the minister and the board of management of this new tax collection agency, and should we be concerned about it getting too far away from parliamentary scrutiny and getting to the point where it is running its own business without enough oversight by Parliament? I can't answer the question as to whether or not that's going to happen, but it is something that should be of concern to parliamentarians from right across the country. Are we creating Super Big Brother with the tax collection agency, without enough control by the government?

On the question of negotiations, I suspect we will be able to negotiate at least as good a deal with the agency. The problem with the loss of rights is that we will not be able to negotiate staffing and classification with this new agency. We can't negotiate those with the current Treasury Board either, but the current legislation, the Public Service Employment Act, gives us some assurance as to what will be done and how it will be done and provides us with mechanisms to advance our case and the case of our members when they feel they've been disadvantaged by something that has happened.

Those guarantees are removed when Revenue Canada becomes an agency. It is left to the discretion of the employer to set staffing policies and to provide for classification. There is no guarantee that we will have a mechanism by which we can address our concerns with the agency. We are dependent on the goodwill of the management of the agency to address those concerns through consultation, without any recognition that their decisions are subject to a third-party review or that they are even subject to review internally. That is a great concern to us.

On the collective agreement itself, we expect we'll be able to do at least as well with the Treasury Board. At least we'll know the people we're dealing with.

The Chairman: Thank you, Mr. Hindle.

Do you have a final question, Ms. Phinney?

Ms. Beth Phinney (Hamilton Mountain, Lib.): Yes. I'd like to make a couple of comments first, because of the question that was raised last Wednesday, and it's been raised here again. The minister will table with the committee figures that show that the direct cost associated with the move is $3.2 million. That's less than 0.5% of the department's budget.

I'd like to also comment that a dozen employees out of the 40,000 or so in the department are dedicated to the agency, not thousands. I'd just like to clarify that.

I also have a copy of a letter from Ernie Eves, the Minister of Finance for Ontario, a copy of which was sent to the minister. He says:

I have also informed Mr. Dhaliwal, Minister of National Revenue, that the CCRA could benefit Ontario and Ontario taxpayers if it is able to administer its taxes cheaply and efficiently and improve services available to Ontario taxpayers.

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The move to go ahead with this agency is because they feel they can do that, so I just thought I would put that on the record.

Mr. Jason Kenney: I have a point of order, Chair.

The Chairman: Yes.

Mr. Jason Kenney: Would Mrs. Phinney be prepared to table the document she's just quoted from?

Ms. Beth Phinney: Yes.

The Chairman: Yes, that's a given. We always ask members, when the refer to a letter or a report, to table it with the committee.

Ms. Beth Phinney: Mr. Hindle, you've argued that the agency will have few or no checks and balances, paving the way for abuse of power. Bill C-43 makes it quite clear that the minister remains fully accountable for administering and enforcing the program legislation.

In fact a lot of accountability mechanisms are proposed. I could go through them; I have seven in front of me here. The minister remains accountable according to clause 6 of the bill; the Auditor General continues as the agency's auditor, clause 87 of the bill; there's a five-year legislative review, clause 89 of the bill; an annual report on operations will be tabled by the minister to Parliament, clause 88 of the bill; the minister's recommendations will go to the Treasury Board for approval, clause 49 of the bill; the Public Service Commission can periodically review the compatibility of principles, clause 56; and there's a mandatory mechanism for review of recourse by a third party after three years, clause 59.

I just wonder, given these facts, what makes you think the agency would act as a Big Brother, as you describe it?

Mr. Steve Hindle: It's only fair to say that these are the concerns expressed by the members of the Professional Institute, and we bring them to the committee as that. They are concerned, despite what they see in the legislation. They have seen the creation of the Food Inspection Agency and the creation of Nav Canada. They have seen the erosion of their employment rights through devolution outside of the federal public service. They are concerned about what the future holds for them as employees of the revenue agency.

We raise the concerns also as taxpayers in this country, who are concerned about the tax collection agency for the government getting too far from Parliament. We believe those concerns should be addressed by this committee and by Parliament.

It's interesting to note that those things talk of what will be the controls and the management of the agency. None of what I have seen from the government, from the minister, or from anybody else speaks to why this is necessary. What is the compelling reason to take Revenue Canada outside of the public service and create it as a separate employer and as a new agency? Where is the compelling reason? Where is the business case that provides some assurance that we will actually see the savings that are being put forth as possible—possible—under this new agency?

We have concerns, and it's important for members of Parliament to hear those concerns so that they have an opportunity to address them as well.

The Chairman: Thank you.

[Translation]

Mr. Lampron.

Mr. Gaston Lampron: I would like to comment on the allusion to Big Brother. Let's imagine an organization like Revenue Canada that would take care of federal income tax, provincial income tax, the GST and provincial taxes, as well as municipal taxes. In the bill, mention is even made of collecting fines imposed by municipal authorities. In fact, everything that is in the realm of collection—electricity bills, for example—is within the realm of possibility. Imagine the power of an organization that would have control over all these sectors, that would be in charge of auditing, bill collection, etc.

Imagine, too, how vulnerable personal information would be. We clearly saw, with what happened at Revenue Quebec, what kind of information can be revealed to the public and extracted from data banks. We would be setting up a data bank of incalculable size, such as had never been seen before.

Has it ever occurred to you that Revenue Canada auditors could be paid on commission and receive performance incentives? That's also contained in the proposal, that's part of the plan to set up the Agency. It's written in black and white. As a person who does audits, who works in the field, I can tell you that there would be serious risks. For example, a person may take his work seriously, perform his duties carefully, by visiting Bell Canada or any other company. But if, at the end of the day, this person can expect to be paid a bonus, there's no guarantee that he'll feel the same loyalty toward Canadian taxpayers.

We must be cautious with regard to services. We're told that everything will be taken care of. I would like to point out one thing. On the one hand, there's the Income Tax Act for federal income, and on the other hand, the Quebec legislation. I have the privilege of not charging GST because I work in Quebec, in the Montreal area. If to this you add Ontario, the municipalities, the manner of collecting tax bills, the calculation of standardized values of this or that, you will be facing a real tower of Babel.

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Some things cannot grow indefinitely. Perhaps our tax system is the envy of the rest of the world. Perhaps it would be a good idea to keep it the way it is. It works very well. Personally, I advise you not to vote in favour of a bill like this one.

Mr. Nick Discepola: Somewhat the opposite viewpoint is maintained by business people, who must also act in the manner you describe. They have to fill out two or three forms. They must first be audited by Revenue Canada regarding the GST and source deductions, and then start all over again for the provinces. It seems to me that your argument may just as well be used by business people to approve the simplifications that are being required and that they themselves requested.

Mr. Gaston Lampron: I would like to add another point, Mr. Discepola. Ask any businessman if he prefers to be visited at his office by an auditor who is going to look at everything or an auditor who is going to look at the GST only. All of them will tell you that they prefer to be visited by the auditors one by one. If a single person comes to a company and submits an income tax bill of $50,000 for the federal government, another $50,000 bill for the provincial government, and then adds the GST and then the provincial tax, which amounts to $25,000 more, and then adds on municipal taxes, this bill will be pretty steep.

Mr. Nick Discepola: I would say that the opposite is true, Mr. Lampron. They're entitled to deal with a single person and settle everything at the same time, instead of having to open their books four or five times in the same year.

Mr. Gaston Lampron: You're talking about a single wicket that gives out information and forms, which is not the same thing. That's not a problem.

[English]

The Chairman: Thank you, Mr. Discepola.

Mr. Lampron, perhaps I misunderstood what you said. In reference to a worker's performance, if he or she were to receive a bonus, there would be a different outlook on their jobs. Did I understand that correctly? Because I couldn't believe it, if that's the case.

Mr. Gaston Lampron: If you look at the legislation of the agency, there is a provision where they can have a system with bonuses to employees. It's in black and white. You just have to ask people. They haven't given us a lot of detail right now, but it's on the table. How will they do it? I don't know, but let me say it opened a door.

The Chairman: It's not that you don't know, because you made the statement that basically the attitude would be different. I'd like to know how the attitude would be different.

Mr. Steve Hindle: May I say something, Mr. Chair?

The possibility of negotiations with the new agency raises the likelihood of discussions on performance pay. How do you measure the performance of an auditor, beyond additional tax collected? You're looking at the possibility of some people being perhaps somewhat more zealous than they would be otherwise, if the amount of additional tax they collect is going to affect their paycheque.

That's not the system we have right now. There are no additional payments to auditors or anybody else in Revenue Canada based on the amount they collect. I think we'd all like to avoid going back to the days when members of the opposition made such a fuss and got an awful lot of press out of the idea of quotas at Revenue Canada. The employees don't want to go back to that, and I'm sure the government doesn't want to go back to the era when we had quotas within Revenue Canada. That's what we're getting at.

Ms. Beth Phinney: I would like to make a statement right now. Bringing this up is just silly and fear-mongering. It's the same thing as saying that maybe everybody in Revenue Canada would have to work seven days a week, would not get any holidays, and would have to give me a Christmas present every year. I don't think my statement is any less valid than what you have suggested by saying there would be commissions or quotas.

The Chairman: Are there any further comments?

Mr. Steve Hindle: I would like to say thank you, Mr. Chair, to you and the members of the committee for your time.

The Chairman: I'd certainly like to thank you as well. You bring to our attention some very important points that, as you know, this committee will take into consideration as we study this bill. That's precisely what this committee's function is: to get various perspectives on the table, to reflect upon them, and to make sure the people of Canada receive the best possible service they can. On behalf of the committee, thank you very much.

We're going to suspend for approximately two to three minutes and then we'll be back.

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The Chairman: I'd like to call the meeting to order and take this opportunity to welcome representatives from the following organizations: the Customs Excise Union, the Public Service Alliance of Canada, and the Union of Taxation Employees.

We will begin with the Customs Excise Union, Mr. Ronny Moran, president.

Welcome.

Oh, Nycole Turmel, will you be speaking on behalf of everyone?

[Translation]

Ms. Nycole Turmel (Vice-President, Public Service Alliance): Good morning. My name is Nycole Turmel and I am the Vice-President of the Public Service Alliance. I will be doing the first part of the presentation and my colleagues Dave Flinn, of the Union of Taxation Employees, and Roonny Moran, of the Customs Excise Union Douanes et Accise, will speak after me.

First, on behalf of the Public Service Alliance of Canada, the Union of Taxation Employees and the Customs Excise Union Douanes et Accise, I thank you for giving us the opportunity to discuss Bill C-43 with you.

As you perhaps know, the Public Service Alliance has over 155,000 members, the vast majority of which are employed by the federal public service. We take our responsibility to represent the interests of all our members very seriously. That's why we're here today.

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Together, our three organizations represent the vast majority of workers who will be transferred to the new Customs Agency if this agency does come to pass. We are united in our firm opposition to the creation of this new agency. For over two years, since the federal government declared its intention to create this new agency, we have been following the issue closely.

I will let my colleagues describe the reasons why we are opposed to Bill C-43.

I would like to raise one last point before I give them the floor.

[English]

It's important to point out that for us and for the members we represent, the federal government plays a dual role: that of policy-maker and that of employer. The policies and practices the federal government puts in place have direct implications for our members on both these levels.

The proposed legislation we have before us, Bill C-43, is a case in point. Our brief outlines the objections we have from both these perspectives. It points out why Bill C-43 is bad public policy and why it would make labour relations worse.

[Translation]

I will now give the floor to my colleague David Flinn of the Union of Taxation Employees.

[English]

Mr. Dave Flinn (National President, Union of Taxation Employees): Thank you, Mr. Chairperson.

Let me first say that the Union of Taxation Employees appreciates that this is a committee with an extremely charged agenda and heavy responsibilities. It is all the more bizarre, then, that we should be here in this place and at this time, discussing a piece of legislation that can be fairly described as an idea in search of a rationale.

When the notion of the Canada Customs and Revenue Agency was first mentioned in the 1996 Speech from the Throne, it was presented as a cost-effective, more efficient vehicle for providing service to the public. However, events have now overtaken the agency concept to the point where it fails to meet all of its stated objectives. It cannot be justified on the basis of need, bureaucratic efficiency, or cost-effectiveness.

As members of Parliament, you represent the direct political will of the Canadian people. When it comes to bureaucratic and government accountability, the buck stops at your desks in the House of Commons.

Revenue Canada, as presently structured, is fully accountable to Parliament and the taxpaying public through the Minister of National Revenue. The department's policies, programs, and activities are open to daily scrutiny during the House of Commons Question Period. The minister cannot forever avoid the tough questions.

On the other hand, the Canada Customs and Revenue Agency poses a challenge to parliamentarians, as guardians of the public trust and interest. For although its promoters repeatedly stress that the new agency will be fully accountable to our elected representatives, this is misleading at best.

To gauge the commitment of the agency's promoters to parliamentary oversight, one need look no further than the senior bureaucrats' April 1997 progress report. This document brazenly suggested exempting the agency's operation from the fundamental principle of ministerial accountability to the House of Commons. This elitist and anti-democratic proposal was withdrawn in the face of furious opposition from various quarters. The minister may well insist it was partially restored at his insistence. In fact nothing was done to correct this outrageous affront to parliamentary oversight prior to the agency's critics raising the alarm.

Despite this forced backtrack, the agency will still face less scrutiny from Parliament than is now the case. It is just plain common sense that an arm's-length agency would be less concerned than a fully accountable government department in responding to the questions or concerns raised by individual MPs on behalf of the public. The agency would find it easier to stonewall Parliament while at the same time providing a pretext for the minister of the day to shift the focus of accountability to the agency's top bureaucrat, the commissioner.

As now envisaged, the agency's enabling legislation would permit a full parliamentary review only five years after it had begun operation. A lot can go very wrong over such a broad expanse of time. Yet the agency would continue to be funded largely through parliamentary appropriations. In political terms, this is a clear case of taxation without representation.

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By distancing the agency from the day-to-day oversight of the minister's office, the minister himself or herself risks becoming buffaloed by senior bureaucrats. Under the agency structure, the minister would be presented with a prepackaged corporate business plan, over which he or she would have had little specific input, as a virtual fait accompli.

There now exists a sensible balance between the formation of taxation policy, which is the preserve of the Department of Finance, and the implementation of that policy under the Minister of National Revenue. Agency status would upset this balance. Senior agency bureaucrats would inevitably enter into a turf war with their opposite numbers at Finance—a costly and unproductive exercise that serves no one's best interests.

We are told the agency's primary goal is to enter into agreement with the provinces and municipalities to administer and collect their taxes. Yet to date, despite a protracted and aggressive charm offensive by the minister and the deputy minister, only a tentative agreement with the Nova Scotia government, concerning workers' compensation and other minor tax issues, has been initialled. Not a single agreement, not even a non-binding letter of intent, has been reached with any other province.

We are of course aware of the minister's testimony to this committee last Wednesday. We are also aware of his new spin on the question of provincial involvement. By his own admission, he has spent two years wooing the provinces. He met with all the finance ministers a year ago. Despite this effort, Mr. Dhaliwal is only able to bring forward anecdotal comments and letters of support in principle. I might say that the letter from the treasurer of Ontario, Mr. Ernie Eves, which we heard about this morning, is news to us. We were not aware of this before.

The question cannot be asked too many times: Why is it that the best the minister has to show for his efforts is an agreement to collect workers' compensation premiums for the Province of Nova Scotia? This is putting a brave face on a very bad situation.

We would be tempted to say that the minister has put the cart before the horse. However, unfortunately for him, he seems to be missing the horse as well. This of course is no laughing matter. We're dealing with the administration and collection of national revenue, arguably the most critical of all government functions, employing one in every five individuals who work for the federal public service.

Again the minister tells us, and I quote, “This is about creating options for the provinces...about building a vehicle.” With respect, this is far removed from the original intent of the agency proposal, and Mr. Dhaliwal and Mr. Wright know this very well.

It is scandalous to think that the taxpayer would be called upon to support the creation of a new bureaucratic structure in the hope that provinces might participate. To borrow the minister's analogy, if this agency concept is a vehicle, it is one without wheels. Listening to the rhetoric of its supporters, however, it does seem to have a rather large gas tank.

Let's look at the present reality, not future hopes. Quebec and Ontario have flatly refused to consider buying into the agency. Again, we heard about a letter this morning, which I'd like to have a look at to see what kinds of guarantees it contains. In fact Ontario is actively considering the establishment of its own tax administration and collection department, independent of Ottawa, as is already now the case in Quebec.

Initial lukewarm support from several western provinces has cooled rapidly. Even Prince Edward Island has told Ottawa that it is not prepared to cede any further tax authority to the federal government. Revenue Canada's own internal documents report that:

The provinces want to see the Agency up and running before deciding whether to have it administer more of their tax programs.

Despite their dreams, the agency's promoters have shown by their own actions that they realize provincial support is not in the cards. As an example, initial plans for a federal-provincial council on tax administration were quietly dropped from the agency's original proposal.

The same common-sense reasoning that holds back provincial participation applies even more dramatically to regional and municipal governments, which would have nowhere near the clout to influence agency policies and actions.

So the agency appears to be all dressed up with nowhere to go. Faced with this reality, what could happen next?

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One scenario would see an over-ambitious agency move to trim costs by reducing staff and services to the public. A more probable direction would see the imposition of user fees. As proposed, the agency would be empowered to use user fees “for the provision of a service”. That's from paragraph 60(2)(b) of the bill. This immense loophole could see both individuals and businesses paying additional fees for the privilege of paying their taxes.

Early on, the agency's backers accepted that the biggest savings would come from tax harmonization. As we know, the extension of the HST, or harmonized sales tax, is a non-starter, except in three eastern provinces, and on a recent trip there, I heard the HST colloquially called the “hated sales tax”. Nor will the proposed agency require the provinces to pay for the collection and handling of their taxes if the provincial program is not harmonized with the federal program. This free service involves more cost to the agency, not less.

While yet to be approved by Parliament, the agency is already costing taxpayers money. The minister is unwilling or unable to tell the members of this committee just how much taxpayers' money has been spent on this dubious project. As noted by my colleague, Steve Hindle, there was an article in the Ottawa Citizen this morning outlining some numbers on the cost of all this. We too have applied to Access to Information to try to find out what the costs of the agency have been up until now, and so far all we have received from them is a bunch of blank pages. I'd like to thank the Citizen for helping us out a bit and getting the financial details we needed.

We do know that hundreds of Revenue Canada employees have been diverted from their regular work to participate in design teams and other exercises dedicated to realizing the ambitions of senior bureaucrats. This costly diversion has distracted the department from its regular work. It has also seen the layoff of hundreds of term and casual employees, some of the very people who provide the front-line service to taxpayers.

Another myth holds that the agency would become a leaner, more efficient deliverer of taxation services than Revenue Canada. Yet the structure of the proposed new agency actually adds another layer of bureaucracy, in the shape of an appointed board of management. While having only nominal oversight role, the board would still require time, money, and staff resources that might be deployed elsewhere.

At the same time, the agency would still be bureaucratically accountable to Treasury Board for such administrative matters as its corporate business plan and human resource plan. Therefore, the old reporting mechanisms remain in place, new bureaucracy is added, and the agency is hardly the lean, mean tax machine its supporters would have us believe.

There is also legitimate concern over the potential of one huge bureaucratic entity holding massive amounts of critical personal financial information. Even internal Revenue Canada memos acknowledge that, and I quote, “There are privacy concerns among some stakeholders related to the creation of a `Big Brother”'.

I'm not for a moment suggesting that the agency would be anything less than scrupulous in its efforts to maintain client confidentiality. However, perception is everything, really.

A Royal Bank survey released this past October 30, not surprisingly, revealed that Canadians cherish their privacy and are worried about the security of their personal information. However, to quote from the Royal Bank's news release reporting the survey results:

Government agencies—such as Revenue Canada—and banks rated most highly in terms of protecting customer information.

Canadians are clearly comfortable with the taxation status quo when it comes to the privacy issue.

This leads us to our concluding point. There is nothing preventing or encumbering Revenue Canada from fulfilling the policy goals of Bill C-43 under its present departmental status. While there will always be room for improvement in any organization, Revenue Canada has made great strides in recent years in becoming more attuned to the needs of its clientele, through streamlined account processes, a single window, one account number, switching debits and credits around, etc. A lot of work has been done recently that the business community has found very helpful, but this was done as a government department.

For instance, the corporate community might have been expected to go to the barricades in defence of the agency concept. Despite the minister's listing of all the supposed benefits to business, these well-organized and well-funded organizations have been conspicuous in their absence in the ensuing public policy debate.

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We have met personally with big business organizations. They appreciate that such departmental reforms as the business identification number and single-window service have responded to many of their past concerns. They are also aware that a Public Policy Forum survey commissioned by the department last year showed that 40% of the business respondents saw no advantage to the agency—40%. More than two-thirds thought it would either increase or maintain their costs of dealing with the department as currently structured.

The many compelling arguments against the agency are strictly non-partisan. They cut across all ideologies and all political party lines. We urge committee members to address Bill C-43 as a matter of common sense, rather than one of political or partisan advantage.

We end as we began, by asking the question, why are we all here? The agency business plan is in tatters, the provinces aren't on board, business is ambivalent, tax experts aren't buying the need for an agency, and of course neither are a great majority of Revenue Canada workers. The agency means more bureaucracy, costs, and fees for ordinary taxpayers to shoulder. Service levels and staffing could well decline in communities across Canada.

Each of you on this important committee appreciates that there are many more important issues you could and should be addressing than the pet project of senior Revenue Canada managers. In every respect, Revenue Canada as now constituted is a superior option to the proposed Canada Customs and Revenue Agency. Bill C-43 is so fundamentally flawed that it should be withdrawn.

Thank you, Mr. Chair.

The Chairman: Thank you very much, Mr. Flinn.

You can probably hear some bells going. That means we have to go and vote, but we have approximately 10 minutes.

Mr. Moran, will you require more than 10 minutes for your presentation?

Mr. Ronny Moran (President, Customs Excise Union): I don't think so.

The Chairman: Okay, then begin. Thank you.

Mr. Ronny Moran: Thank you, Mr. Chairman and members of the committee.

Right from the top I should like to take the opportunity to thank the Deputy Minister of Revenue Canada for inviting and including CEUDA representatives in agency design teams. Throughout the work of the agency design teams, and despite the challenges before them, the deputy minister and senior managers remained professional, and their efforts must be acknowledged and complimented.

I should also like to take this early opportunity to issue a stern criticism to the government for having determined that Revenue Canada should develop the framework for the agency without any parliamentary appropriations whatsoever. It is deplorable to note that there was a complete absence of funding and that many of our term members, as well as those of the Union of Taxation Employees, were recently laid off because of the requirement by Revenue Canada management to release savings after having spent unbudgeted dollars developing the agency.

For the record, and to erase the need for any questions about how CEUDA and UTE have taken two different approaches to dealing with Revenue Canada in the department's drive to design the agency, I will also say this: while UTE has not participated on any agency design team, CEUDA has.

This is not to say CEUDA and UTE hold different views about Bill C-43, as nothing could be further from the truth. CEUDA and UTE share exactly the same perspective about Bill C-43. Each union, however, simply decided to take varied approaches in dealing with Revenue Canada. UTE chose to fight the administration publicly, from the outside, while CEUDA chose to give the consultation process a chance in an attempt to shape and influence the outcome from within.

Despite participating on agency design teams, CEUDA has been opposed to the creation of the agency, and we have made this position clear from the outset, as you will note from my April 15, 1998 letter to CEUDA members, copies of which have been or I guess will be distributed for your review.

Members of the committee, you must understand that CEUDA and UTE share equally the same concerns with respect to Bill C-43 and feel this bill should be withdrawn.

[Translation]

Bill C-43, if passed by Parliament, will do one thing, and only one thing, and let us all be very clear about it from this point on: Bill C-43, regardless of the seeds that brought it into fruition, is now only aimed at giving managers in this country's federal tax administration bureaucracy more flexibility, freedom, and power over human resources; it is, really,... that simple.

Today, we must forget what Bill C-43 was intended to do and the vision that launched it in the 1996 Speech from the Throne, and we must forget what partisan interests are saying it will now deliver in relation to that; realities have drastically changed since the concept of this Agency was introduced, and today's promises by the Minister of better days ahead are now really only idealistic parenthood statements tied to that initial vision.

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The promises of more efficiency, increased simplicity, less overlap, and lower compliance costs are superficial, and border on the farcical, making it difficult to see any credibility in the Minister's promotion of the Agency. More flexibility for managers over human resources; that's what Bill C-43 is really now all about, and that is what it will aim to deliver. We must talk about today's truth and set aside the rhetoric founded on the 1996 vision.

[English]

One need only look at the so-called agency design teams to see the truth. In essence, Revenue Canada established nine teams to design the new agency framework, but each of these teams had only one objective: to review, examine, study, assess, and research processes that, when implemented under authority of Bill C-43, would only alter, change, modify, or transform one aspect or another of the human resources regime in the new agency. It is simple. Nine Revenue Canada teams were struck and dedicated to revamping a human resources regime currently administered by the Public Service Commission.

To illustrate, I shall announce the name of each team, and while I do so, I would ask that you observe how each team is solely related to human resources: the classification design team; the employment equity design team; the training and development design team; the executive group and management design team; the recourse design team, which is for internal grievances and such; the staffing design team; the National Joint Council design team; the workforce adjustment design team; and the transitional design team. Clearly the raison d'être for each of these teams is human resources reform. There were no other teams to speak of in the agency design; these were it.

If Bill C-43 is to deliver what the minister is promising, if Bill C-43 seeks to remove overlap because it will lead to a union of provincial and federal tax administrations and because it will lead to harmonization of provincial sales taxes with the federal GST, where is the harmonization design team? Better, where is the design team for increased accountability to Parliament, where is the design team for increased efficiency and simplicity, and where is the design team for lower compliance costs? Human resources reform at Revenue Canada is all Bill C-43 offers.

How am I doing on time so far?

The Chairman: You have two more minutes, but you'll get more time when we come back, obviously.

Mr. Ronny Moran: Okay.

The Chairman: Perhaps we should stop now.

Mr. Ronny Moran: That's fine.

The Chairman: We'll go and vote. All the members will of course come back to the committee right after the vote and then we'll finish off your presentation and engage in a question-and-answer session.

Mr. Ronny Moran: Thank you.

The Chairman: Thank you. The meeting is suspended.

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The Chairman: I'd like to call the meeting to order.

Monsieur Moran, we'll hear the remaining portion of your speech and then we'll get into the question-and-answer session.

Mr. Ronny Moran: That's fine.

[Translation]

After having pointed out that design teams should have existed, I will continue with what follows.

My counterpart from the Union of Taxation Employees has already deconstructed the myths peddled by the Minister and brought to your attention some of the very damaging impacts that will no doubt be brought on by this Agency in the public domain should Bill C-43 receive Royal Assent. Bill C-43 will not remove overlap given there are no indications it will lead to a union of provincial and federal tax administrations, and given there are no signs it will lead to harmonization of provincial sales taxes with the federal GST; it will not increase accountability to Parliament, nor will it increase efficiency and simplicity, and it will definitely not lower compliance costs.

If Bill C-43 is passed, managers of the new Agency will have more "flexibility"—that is definite. They will have more versatility in matters of human resources, more freedom to move and transfer staff, and they will have more power to de-staff. Rest assured, the better days the Minister speaks of, in the opinion of many of our members, will never see the light of day. Canadians can expect less service, user fees, more bureaucracy, and less accountability. Nothing more and nothing less will come of Bill C-43.

While CEUDA is prepared to acknowledge that there are problems with the existing human resources regime, we firmly believe that Bill C-43 is not the solution. Bill C-43 is not on not going to deliver what was originally intended and it is not the proper mechanism for improving the public service human resources regime.

[English]

The government should act responsibly and withdraw Bill C-43 for its failure to deliver on the vision that gave it birth and in recognition that human resources reform must take place in the whole public service, not just at Revenue Canada. The government should also take a serious, hard look at the problems inherent in the Public Service Employment Act and in the Public Service Staff Relations Act as they currently exist, and the government should do this in honest consultations with public sector unions.

Our members repeatedly ask us why the federal government is taking a back-door approach to fixing the human resources problems in Revenue Canada, why the minister is masking the whole exercise with so much convoluted rhetoric, and why a band-aid approach is being adopted as a fix. It is not coincidental that employees of Revenue Canada, our members, ask us these questions. They are not blind to the truth, and their questions shed a strong, bright light on the reality of events unfolding before them, given what agency design teams and Bill C-43 have offered thus far.

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It is CEUDA's sincere hope that you will not act blindly, that you will not be fooled by rhetoric and heed the power-grab attempted by senior Revenue Canada officials. Division of powers in government is not a myth; it is one of the most important doctrines explaining why government is organized in the manner it is. Do not be fooled: division of powers is exactly what this bill will eradicate if enacted.

[Translation]

On behalf of CEUDA's 10,600 members, I respectfully thank you for the consideration your committee will lend to our concerns and I trust you will afford our request the attention it deserves.

[English]

The Chairman: Thank you very much, Mr. Moran.

Mr. Ronny Moran: Just before going into the questions and answers, I would like to say something. Our brief was shared with you sometime last week, and I just want to point out two of its paragraphs, putting aside the concerns that have been expressed thus far with regard to the costs of setting up the agency, the power grab, a very high volume of information being controlled by a very small group of people, and the HR concerns.

I want to read into the record paragraph 136, which is at the conclusion of the brief:

Proponents of the new Agency also argue that “experience of other countries such as the United Kingdom, New Zealand and Australia demonstrates that administrative organizations with greater managerial autonomy, combined with meaningful accountability mechanisms, can improve service to the public”. This argument, as outlined in the Canada Customs and Revenue Agency Backgrounder, is spurious to say the least. New Zealand, which has privatized just about every government service, has suffered enormous economic and social disruptions and is just about bankrupt, and should not be used as a model by anyone with a serious commitment to the public interest. Moreover, contrary to the impression left in the Backgrounder, the United Kingdom has not privatized or devolved its revenue collection functions.

The other paragraph I would like to point out to the committee is paragraph 35 on page 7. I won't read that one into the record, but I will tell you that I live in Quebec, and I think everybody is looking at what the indications are for next Monday. If this government doesn't realize how much they'd be throwing another log into the fire by not taking into consideration the fact that they would be creating what is already referred to in Quebec as an English Canada revenue agency....

On that note, we will open the floor for questions.

The Chairman: Thank you, Mr. Moran.

We'll now engage in a question-and-answer session, beginning with Mr. Kenney.

Mr. Jason Kenney: Thank you, Mr. Chair.

I'd like to thank all three witnesses and their organizations for very insightful and thorough presentations.

I was agreeing with about 90% of what Mr. Moran had to say until the very end there, and I just want to correct the record, if I could, with respect to New Zealand. Yes, they have adopted alternative service delivery in most of their departments, but New Zealand's fiscal and economic health is actually quite considerable today, in part because of those changes, one would argue. They're certainly far from bankrupt, as they were 10 or 12 years ago.

Also, given that the parliamentary secretary quoted from a letter from the Ontario Minister of Finance, which I haven't yet received, I would like to quote from my own letter from Mr. Eves, wherein he says:

Ontario is unable—due to a lack of information—to assess whether the CCRA will provide improved services, at lower costs, to Ontarians.

He goes on to say—and I'm paraphrasing—that the province is looking at setting up their own separate tax system.

The Chairman: Mr. Kenney, will you be tabling that letter?

Mr. Jason Kenney: I certainly will, as soon as I receive the other one, Mr. Chairman.

He says:

It is therefore not possible at this time for Ontario to take a position on whether it would consider contracting with the CCRA....

The Chairman: What's the date on that letter?

Mr. Jason Kenney: This is from October of this last year.

Ms. Beth Phinney: This year or last year?

Mr. Jason Kenney: It's from 1997, but recent conversations with his ministry indicate that they have the same position.

Ms. Beth Phinney: They can't decide.

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Mr. Jason Kenney: Having said that, Mr. Chairman, I would like to ask the witnesses a question. They've all suggested that the real raison d'être of this bill is to allow senior managers of Revenue Canada to change their human resource management practices, and that the alleged efficiency gains are not really at issue here.

Why do you suppose the department has gone to these great lengths of proposing this legislation to set up an agency when, as you have all testified, that is not necessary to achieve the human resource management changes they seek to achieve?

I asked the minister the other day about whether or not he agreed that these human resource policy changes could be adopted without going to the agency model, and I recall him having said he wasn't sure whether or not that was the case, but he didn't think it was.

So my question for you is, why would the department have gone to these great lengths to set up the agency, when it could have simply exempted itself from the public service employment practices under the status quo?

Mr. Dave Flinn: I don't think the agency was set up with the particular goal of changing human resources. That's one facet of it. Obviously it was set up to achieve the political agenda of harmonizing the provincial sales taxes with the GST. That was the first driving force, from what I've been able to find out. Then when the provinces didn't buy into that proposition, Finance officials and Revenue Canada officials went back out with a second sales pitch: that the provinces could turn over to the federal government the collection of non-harmonized taxes—in other words, excise taxes on liquor, gas, or whatever. They went out with two political agendas, both of which have failed.

As part of an overall renewal of Revenue Canada, we acknowledge that the human resource package needs to be changed. There's no question about that; it's not adequate now. But it can be done without going to an agency. The problem we have with going to an agency is that our members have certain protections right now that come under the Public Service Employment Act and part I of the Public Service Staff Relations Act. If we move away from those two legislative umbrellas, we're going to wind up in an agency that has a policy on human resources, a policy on staffing, and a policy on classification that are not subject to legislative review.

We see a great possibility that we could lose rights that we have now. Just to give a simple example, when we move from part I to part II of the Public Service Staff Relations Act, the ability to go to adjudication on non-disciplinary demotions and firings goes with it. As an agency, we would not be able to challenge to a third party a non-disciplinary demotion or firing—that would be for incapacity or incompetency.

The three unions have spoken to the deputy minister a number of times and said, “That's one example. We don't want to lose our recourse for somebody you're going to fire. Surely you would not want to fire somebody and not have to stand up to scrutiny on this.” He wouldn't give us any guarantees that we would go back to cover this particular recourse.

They're two separate issues, Mr. Kenney: the agency being created in the first place for a political agenda and the HR thing coming along separately. But if we stayed as a government department, the changes could be made through legislative amendments to the Public Service Employment Act, which have been talked about for a long time, and now the commission has done studies on it. We would prefer that route, where we would still have legislative protection, as opposed to going to an agency, where we would have an agency policy that would be subject to the whim of the board of management or whatever, and not subject to legislative control.

The Chairman: Thank you, Mr. Kenney and Mr. Flinn.

[Translation]

Mr. Perron.

Mr. Gilles Perron: Good afternoon, Ms. Turmel, Mr. Flinn and Mr. Morin.

Mr. Flinn, your brief describes the Agency that the government could establish as being a "Big Brother"'s Agency. Given the way that Mr. Lampron has described this big brother, I feel like calling it the red monster machine. I'm wondering whether it would be possible to treat two employees in the same type of position, one working for the red monster and the other in some department, differently?

Mr. Dave Flinn: I think so. The rules governing the process and the policies of the Agency could be totally different, with the result that the legislation that is currently enforced with respect to employment or any other thing could be applied in a totally different way. The conditions of work in an agency could very well be totally different.

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It's strange, because part of the bill states that the people working for the Agency should be able to be transferred to the government and vice versa. However, I don't see how this can happen if the staffing and classification policies are different. Accordingly, it is very possible that the people working for a department could be treated very differently from those working for the Agency.

Mr. Gilles Perron: I have another question that is intended for Mr. Morin. This morning, you listed nine different types of teams. If my memory serves me correctly, I was told that there were about 12 people at the Department of Revenue who were working on this new red monster. Do you think it's possible for nine teams to be run properly with only 12 people?

Mr. Ronny Moran: The answer is very easy; there were at least 12 people on each of these teams. There were nine teams plus all of the administrative personnel who look after coordination. So there were a lot more than 12 people. On some of these teams, there were 10 to 12 employees. I don't know if that answers your question.

Mr. Gilles Perron: Thank you, Sir.

[English]

The Chairman: Thank you, Monsieur Perron.

Mr. Martin.

Mr. Pat Martin: Thank you, Mr. Chair, and thank you again to the panel members.

I was very interested in the overall theme or the community of interest between both your presentations. Again, we seem to be seeing something that's driven by ideology and not really by any basis in fact or any business plan that could clearly demonstrate any savings.

I'd like to hear you comment further on the fact that all of the contemplated savings seem to be found in the human resources arena. Certainly we've seen this with the ASD in places such as Goose Bay in Labrador, where they laid off all the non-military personnel and contracted out to a foreign company, which then hired the same people back at half their salary. Obviously you can save money if you're going to gut people's wages and throw them out on the street.

So I'd like to hear what kind of crystal-ball forecast any of the panellists could give as to the possibility of job losses and the possibility of squeezing back at the bargaining table in this newly configured agency.

Mr. Dave Flinn: The deputy minister and the minister have said on numerous occasions that this is not an exercise in downsizing, and I have no evidence from them to dispute that particular suggestion, in terms of coming from Revenue Canada. But as a previous speaker earlier this morning mentioned, we only have to look at Nav Canada and the Food Inspection Agency to see what happened there. There was no talk of downsizing prior to the agency being established, but then when it was up and running, there were over 1,000 jobs gone at Nav Canada and about 375, I believe, at the Food Inspection Agency.

But what really gives our unions pause for concern is that, as a type one transfer to an agency, the jobs of our members who go to the agency will be guaranteed for a two-year period. Beyond that, there's nothing. We asked the deputy minister and his officials to give us some level of comfort, some guarantee, that there would be a job security package in place after the end of the two years. The deputy minister, on numerous occasions, told me he couldn't do that. I asked why not, and I got no answer. That certainly doesn't raise my comfort level, when he says, “I can't give you job security, but I can't tell you why.” So we were obviously very concerned about job losses, because of the lack of commitment from the deputy minister.

In fairness, the Public Service Alliance of Canada has negotiated a job security package in the collective agreements that will protect us when we get beyond the second year in the agency. But who knows? Revenue Canada does not have a history of downsizing, and we certainly hope that doesn't happen, but the comfort level I had that it wouldn't happen was certainly not enhanced by the lack of support from the deputy minister when we did ask him to guarantee that there would be job security for us.

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Mr. Ronny Moran: If I may, I would just like to add something.

Initially the three unions—PIPS, UTE, and ours—were involved in the consultation process. UTE and PIPS subsequently decided to withdraw, but when we were all three there, the initial proposition was that there be seven teams. Subsequent to discussions with the deputy minister, we were able to take workforce adjustment out of the NJC, because we figured it had enough merit to stand on its own as a design team, and at the same time we suggested employment equity, and it was agreed that we would add employment equity as a design team. But we made it very clear—“we” being the three unions—that workforce adjustment should be the first priority of any of those design teams in terms of re-establishing the comfort levels, certainly of us, as the representatives, and ultimately of the people in the field.

It it weren't for the fact that the workforce adjustment issue has been resolved elsewhere—which it is, now that it's incorporated into the contract that will carry over into the agency.... Other than the transitional design team, the workforce adjustment design team is one of the only design teams that is still going through preliminary research, although we made it very clear that it should be the first team to get up and going and to produce results. So certainly if it hadn't been resolved elsewhere, we'd have a very critical situation to deal with. We'd have a design team still going through preliminary stages when we told them this is the first one that needs to get out of the gates.

The Chairman: Thank you, Mr. Moran.

Mr. Brison.

Mr. Scott Brison: Thank you, Mr. Chair.

The pendulum in government tends to go from one end too far to the other end. There's rarely a happy medium.

Given that Canadians are looking for more responsiveness from the public service.... Perhaps 10 years ago the public service was less responsive than it is today, and in fact it's evolved significantly. Currently some of these changes, such as the ASD trend, may be arguably going a little too far in the other direction.

What initiatives has PSAC pursued proactively to reform public service from within, to meet some of the demands that are reflected by this legislation, but in a more holistic way, looking at all departments and the way our public service is working in Canada?

[Translation]

Ms. Nycole Turmel: To answer your question, I would say that the Alliance had indeed taken several looks at the way that it could ensure that the policies are changed and improved as far as representation is concerned. To cite but one example, we have, on several occasions, requested that we come under the Labour Code rather than the Staff Relations Act. This is a big priority for the Alliance.

Obviously, we have fought the various proposals and new approaches that the employer has come up with because we feel that they did not meet the needs of the people in terms of service to the public, funding and staff relations.

I'd also like to broach the issue of classification and staffing. We are in favour of a classification review within the Public Service. However, the Treasury Board approach does not correspond to ours.

I'd also like to talk about staffing, which is another Public Service issue. If you take a look at the high percentage of casual or seasonal workers in the Public Service, if you make a comparison between the strong representation of senior managers and that of people providing service to the public, you can see that there is a wide gap.

The regulations governing collective bargaining constitute another priority for the Alliance in order to provide stability within the federal public service and provide a better service.

We have, therefore, undertaken several initiatives. We are hoping that the government will adopt the same attitude, namely, to listen to all Canadians.

[English]

Mr. Scott Brison: Do you see the potential of, for instance, introducing some market forces into the delivery of public service, without having to necessarily privatize specific services? By “market forces”, I'm referring to things such as competition within the public service or elements of more quantitative performance evaluation and that sort of thing. Is that one way that could avert the more draconian move to the privatization of a particular service, as Bill C-43 would suggest?

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Mr. Dave Flinn: When you're just talking about Revenue Canada, it's a little difficult to put our operation on a business footing. Internally, there are performance reviews: each employee's performance is reviewed periodically, and if you don't muster up, measures are taken to try to improve it. But to put Revenue Canada more on a business footing is difficult, because we collect taxes. We're not the most popular people in the world, to say the least, and to try to become more corporate-like would be difficult for our department.

Having said that—and I give credit to management where credit is due—there have been a lot of improvements recently in terms of how Revenue Canada deals with the taxpaying public. Before, you used to have a payroll account, an individual account, a corporate account, and God knows what else. You could have 10 accounts. Now you have one account. There's been a lot of streamlining, and Revenue Canada has gotten a lot of praise for its efforts at providing better public service.

Our point is quite simple: it's already been done. Any more improvements can certainly be made, but they can be made just as well in the context of a government department as in an agency. For the agency, the only rationale that makes sense to me is that the board of directors of the agency would be set up to have representation from each province so that the provinces' comfort level in letting the feds collect their provincial taxes would be raised, because they would have a say in the operation of the company. That hasn't happened.

We don't see any other reason you'd want an agency to create another layer of management bureaucracy or whatever, when Revenue Canada is doing very well, as a government department, in responding to the needs of taxpayers and the business community in simplification and whatever else.

Mr. Scott Brison: Thank you.

The Chairman: Thank you, Mr. Brison.

We'll hear two questions, one from Mr. Gallaway and one from Ms. Leung, and then we'll have comments or questions from Ms. Phinney.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): Thank you, Mr. Chair.

Mr. Moran, you pointed us to the nine teams that were developed to study this or to work in this transition period. The Ottawa Citizen of, I believe, today or yesterday has an article wherein Mr. Hindle from the Professional Institute of the Public Service makes a criticism about the costs of studies being done with respect to this transition, if I can call it a transition.

Do you know what the costs would have been? I don't know if you calculate those types of things, but can you give us an idea as to what you expect the costs would have been for the nine teams?

I wonder also if you could tell us if there are any outside agencies coming in. Although their expenditures would not necessarily show directly relative to a transition or a change to an agency, they in fact have been engaged and have been paid considerable dollars to advise officials from the national revenue department on this change. Who are they?

Mr. Ronny Moran: With reference to cost, what has the people working in the field quite upset is that they see how it's going on.

First of all, we as an organization have to manage travel and so on, so as most people are probably familiar with, we always try to get the excursion rate, have people sleep over a Saturday, and so on. From what I saw, none of that was even attempted in the travel that was involved. The recourse team, for example, travelled to Harvard to meet with some people there.

All the teams had consultants to coordinate their work and to chair the meetings. However, most if not all of them had subsequent people come in for specific purposes. It was perceived, and all the indications were, that cost was no object in the travel arrangements, in who was being brought in, and in who travelled where. Each team had some members travel across the country to meet with groups of employees and try to sell the concept or try to relate to them what their findings and their propositions were.

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I do want to make it clear that a lot of good came from those design teams, and that could easily be applicable to the public service as a whole, so I'm not taking a tear systematically at everything that was done. But certainly when we get to the tail-end of the fiscal year and our collectors are told they can't go out and collect because they don't have gas money, and when term employees are being let go, some of whom generate hundreds of times their income in revenue.... Do you understand what I mean? Somebody who earns $40,000 a year sometimes generates $40 million or whatever, and these people are let go because there's a shortfall in the budget.

Logic is becoming very much a luxury, and if that is an indication of what is to be expected when we become fully independent, if that's the desire, some people become very scared by that potential.

Mr. Roger Gallaway: I have one supplementary question. Could you tell us the names of these consulting firms? Do you know any of the names?

Mr. Ronny Moran: I can certainly provide you with a very concise list of them.

Mr. Roger Gallaway: You can provide this committee with a list of the consulting firms?

Mr. Ronny Moran: Certainly. I can do that this afternoon.

Mr. Roger Gallaway: Thank you.

Secondly, the deputy minister, Mr. Wright—and I have to admit this is from a press article—states that the department ran into some unexpected expenditures and priorities that required about $50 million to be reallocated. Do you have any idea of the costs of these committees and consultants' reports, or is that totally beyond your purview?

Mr. Ronny Moran: As was indicated by Mr. Flinn and by our counterpart at the institute, we have filed Access to Information requests, and we would be more than happy to....

Maybe Dave can show the pages, but it's like we're in a communist country when we look at the pages of what came back from Access to Information, because there is nothing on them that would allow us to—

Mr. Roger Gallaway: Mr. Flinn, I would invite you, if you have those materials with you, to table them with the committee.

Mr. Dave Flinn: We filed I think 11 or 13 requests for information of various sorts, including the costs of the design teams that you're talking about. All we've gotten so far is a document that relates to some correspondence between the department and the PMO machinery.

Most of the pages, there's nothing on them. They're blank. There are exemptions under the Privacy Act or the Access to Information Act. We have the title page, a list of the index, and a few other things, but the meat is certainly not in this.

In the Citizen article that we talked about this morning—

Mr. Roger Gallaway: Just one moment. Would you table that with the committee, then, or has that been tabled?

Mr. Dave Flinn: No.

Mr. Roger Gallaway: Would you please table it with this committee?

Mr. Dave Flinn: Sure, I'll do that.

The only thing we know for sure up until now about the design team costs is a statement made by the deputy minister reported in the Citizen this morning, where he says about $3.2 million was spent on the design teams. He mentions another amount of $2.8 million that was spent partly on developing a new human resource regime within the department. I assume that's partly because some of those moneys might have gone for normal events.

So what we have here now is about $6 million that we know of for sure. There's a lot more than the $6 million, I'm sure, but I can't quote you a figure. We've been trying to find out, but access is not working. Mr. Wright did provide some help this morning in the Citizen article.

The Chairman: Thank you, Mr. Gallaway.

Ms. Leung.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Mr. Chair. I have a question for Mr. Flinn.

During your press conference last Tuesday, your vice-president, Mr. Denis Lalancette, implied the agency would not respond to requests for access to information. How could this happen if the bill clearly makes the agency subject to the Access to Information Act? This is quite a contradiction.

Mr. Dave Flinn: I think what my friend was talking about was the fact that we can't get information from Revenue Canada now, and it's not going to get any better when we get to an agency, even if it's the same act.

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I've shown you this document, and I will table it. His concerns relate to the fact that we have tried to get information from the Access to Information people, and we just can't get it. We've hired a researcher to do this, and he tells us in no uncertain terms that Revenue Canada is the worst department in the government to try to get information out of.

So our concern is, if we can't get it now, we're not going to be able to get it any better from the agency.

Ms. Sophia Leung: Well, maybe that's just your assumption. We don't really know. That's not based on fact.

I have a question for Mr. Moran.

Mr. Moran, I understand the agency is trying to really be more efficient in the cost-cutting for the public service, but in your paper, page 3, third paragraph, you comment:

Canadians can expect less service, user fees, more bureaucracy, and less accountability.

What factual information basis do you have to make those statements?

Mr. Ronny Moran: Well, if I may, I'll just add to the first question you asked with regard to access to information.

The access to information commissioner, in his report of last year, was very critical of Revenue Canada. Subsequent to requests we had made, Mr. Gravelle, who was then the deputy minister, made basically a farce of the Access to Information Act, and that was pointed out very clearly. So maybe it would be interesting for members of this committee to go to that paragraph, where the commissioner makes the comments on Revenue Canada with reference to access to information.

With regard to your question, documents have already been prepared wherein they indicate they are researching such things as user fees. Certainly, of all the committees of the House, this committee is dealing with the reality of concluding that bigger is not better when dealing with the banks, and that is the same conclusion we are coming to. We're saying that by creating a bigger tax collection agency—the “red machine”, or I don't know what it's going to be called from this point forward—certainly all the indications are that it will provide fewer services at greater cost and that user fees will be an integral part of that structure.

Those are the indications, and I could certainly provide you with the documents I have in mind when I make those statements. They are department documents.

The Chairman: Thank you, Mr. Moran.

Thank you, Ms. Leung.

Ms. Phinney.

Ms. Beth Phinney: Thank you, Mr. Chairman.

When we make statements as members or Parliament, we don't just say, “Well, I think this could happen” or “I think that might happen”, and then put articles in the newspaper saying there definitely will be user fees. I suggest again, as I suggested earlier this morning, that this is nothing but fear-mongering. There is no clause in the bill that gives the agency any right to charge user fees, and they would need special authority to do this. There is no place at all where this is stated. I just wanted to make it very clear that this would appear to be nothing but fear-mongering.

If you want to give to me proof of where it is in there, and proof that it's not just hearsay, which is what all of you seem to be using this morning.... There is no place where it's allowed.

Mr. Dave Flinn: I would, with respect, draw your attention to clause 60 of Bill C-43. This is a clause on expenditures, but it talks about operational revenues. Subclause 60(2) says:

In carrying out its responsibilities, the Agency may spend revenues received through the conduct of its operations in the fiscal year...

and in paragraph 60(2)(b) it says this includes:

fees for the provision of a service or the use of a facility...

So it's right here, “fees for the provision of a service”. I draw your attention to paragraph 60(2)(b), where it says the agency could charge user fees and would be able to use the proceeds—

Ms. Beth Phinney: Where is the part where it says we can charge user fees?

Mr. Dave Flinn: It's on page 19 of the—

A voice: It doesn't say “user fees”.

Ms. Beth Phinney: What does it say? It says “user fees” in there?

Mr. Dave Flinn: It talks about “fees for the provision of a service”. Call them user fees; call them what you will. This clause allows Revenue Canada to charge a fee for a service and then use that to pay its expenditures. That's what it says to me. If I'm wrong, I'm sure somebody will correct me, but that's the way I read it.

And there are user fees now for certain services that Revenue Canada does provide at the present time.

Ms. Beth Phinney: Well, if there were going to be any new charges or new fees, they would have to get authorization to do that, and there's nothing in here that authorizes that. It authorizes them to continue to do what they're doing and to reallocate the money they're getting, but not to put on user fees.

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I'd also like to mention again something I mentioned earlier this morning: accountability. I read off seven different areas where there's accountability in the agency. Three of those are brand-new accountability clauses: there's a five-year legislative review, the Public Service Commission can periodically review the compatibility of the principles governing the agency's staffing, and there are mechanisms for mandatory review of recourse by a third party after three years. Those are three more accountability points that aren't in there now. I'd just like to put that on record.

The Chairman: Thank you, Ms. Phinney.

On behalf of the committee, I'd like to thank you, Mr. Flinn, Madame Turmel, and Monsieur Moran, for your presentations. It's very important for the committee to hear various perspectives that exist on this legislation, and we'll certainly reflect upon what you have said as we study this bill. Thank you.

The meeting is adjourned.